Executive Summary

IMAF is a member-owned and member-managed limited liability company, organized to provide members an opportunity for active involvement in a diversified capital investment process.

The Fund seeks to involve a base of successful accredited investors from a variety of fields throughout the Eastern Region of North Carolina in a commited seed fund. The fund will seek to enhance the wealth creation of its members by investing dollars as well as time and relationships in early stage, high quality, and high growth companies primarily in the greater Greenville area and eastern region of North Carolina.

Structure
IMAF-EAST, LLC is a member-owned and member-managed limited liability company, organized to provide members an opportunity for active involvement in a diversified capital investment process.

Fund Size
$2.0 million.

Goals
The Fund seeks to involve primarily a base of successful investors from the engineering, medical and dental fields throughout the Eastern Carolina Region in a seed fund. The fund will seek to enhance the wealth creation of its members by investing dollars as well as time and relationships in early stage, high quality, and high growth biotechnology, medical device and life science companies in the Eastern Carolina area and other geographic areas if appropriate in order that those companies achieve success.

Member Profile
IMAF-EAST, LLC’s strength lies in its members—a group of highly successful men and women, from a variety of disciplines within the Eastern Region of North Carolina. Members should have some experience in selecting investments and/or in being able to assist in the growth of IMAF-EAST, LLC’s portfolio companies.

All members must be “accredited investors,” as defined by the Securities and Exchange Commission.

Founder
Timothy R. Janke, J.D.

Active Members
All members are encouraged to actively participate in the investment process, attending screening and monthly member presentations, making personal add-on investments as individually desired, and responding to Fund Executive requests for special expertise or input as he and members conduct due diligence on prospects and assist IMAF-EAST, LLC’s portfolio companies. It is understood that availability to participate may vary by member over the life of the fund and that some members will be more active than others.

Advisors
It is anticipated that “advisors” with venture capital experience will be selected to assist with information regarding trends and opportunities in their industry. This knowledge is valuable since venture funds are candidates to provide follow-on capital in the investment continuum.

Investment Criteria
IMAF-EAST, LLC will use the following criteria, as guidelines, when considering companies for investment.

IMAF-EAST, LLC:

Targets health care, biotechnology, medical devices and engineered products in emerging, high growth markets, preferably (but not exclusively) located in, or near, the Eastern Region of North Carolina. These companies generally are seeking their earliest round of financing. They will typically be at the start-up stage or one step beyond start-up, will be in the process of selecting a management team, and will already have founder and/or “friends and family” money invested in the company.

Often invests in seed or start-up rounds.

Typically invests between $25,000 and $100,000 per company with a company board seat, or observer rights, being allocated to IMAF-EAST, LLC.

Typically initiates and then co-invests with other venture capital funds, angel groups, or Super Angels (high net worth individuals who contribute large amounts to a company).

It is anticipated that IMAF-EAST, LLC will invest in up to 12 portfolio companies, depending upon the total amount of capital committed.

It is anticipated that no more than 10% of IMAF-EAST, LLC’s fund size will be invested in any one company.

Companies that receive investments from IMAF-EAST, LLC possess:

An experienced, dedicated & motivated management & advisory team,

…. With a sound business concept

….Coupled with leading edge technology or a unique product design

.… And the opportunity to become a market leader.

How Investment Decisions are Made
The basic process for determining which companies IMAF-EAST, LLC should invest in is flexible. With input from similar funds, IMAF-EAST, LLC members will periodically review this process. In general, the process includes the receipt, logging, and screening of business plans with company presentations to the Administration Committee. The Administration Committee will evaluate the company through the due diligence process and make a recommendation to the membership at a General Member meeting. The general membership will vote as to whether or not to accept the Administration Committee recommendation regarding investment in a presenting company. A more detailed description of the evolving investment decision process is available.

Administrative Committee Screening
The IMAF-EAST, LLC Administrative Committee will have 4-6 members, elected to rotating terms by the members. It will provide the overall direction and administration of the Fund. Screening meetings will be open to all members and their active participation is encouraged. Administration Committee responsibilities include, but are not limited to:

Networking to find new opportunities

Defining and managing the process of identifying new opportunities and conducting due diligence.

Networking with other angel funds and venture funds to develop deals together and to obtain follow-on funding for IMAF-EAST, LLC companies.

Meeting as required to screen new companies, analyze the results of due diligence, guide investment decisions options for members, and help formulate term sheets for those investments.

Attending and presenting at monthly meetings to:

Present companies so that the entire membership can make decisions regarding fund investments and determine individual add-on investments opportunities, and update membership on general portfolio issues.

Monitoring and managing the Due Diligence processes.

Administrative Costs/StructureIMAF-EAST, LLC will contract with a fund administrator to provide the administrative infrastructure.

Carried interests on excess distributions from fund and add-on investments are provided for the above referenced administrative infrastructure/fund executive services

Add-on Investments Add-on investments are opportunities for members to individually invest an additional amount of their own money alongside the Fund in portfolio companies that are of particular interest to individual members. For example, Company X may indicate that it is interested in a total investment from IMAF-EAST, LLC of $50,000. The Fund may decide to invest $25,000 in the current round in Company X. That would leave an investment of up to $25,000 that could be available for members to invest in the current round on a pro rata basis of units held. In the event that certain members do not elect to take their pro rata portion of available add-ons, other members would have the opportunity to take more than their pro rata portion.

NC Tax CreditAn investment in IMAF-EAST, LLC may entitle investors to a NC tax credit. IMAF-EAST, LLC can become a certified Qualified Grantee Business because of an investment by the NC Biotechnology Center. As a result, individual investors in IMAF-EAST, LLC can apply for a credit of up to 25% of the amount of his or her investment in IMAF-EAST, LLC on the investor’s NC income tax return for the year following the year of investment. This credit applies to investments paid prior to the end of 2003 and has been extended to include 2011.

Miscellaneous Start-up If a member works with a portfolio company as a board member or in any major role, it will be up to the portfolio company and the member to negotiate an appropriate compensation plan.

Support
The Small Business & Technology Development Center (SBTDC), North Carolina Biotechnology Center ( NCBC ) and East Carolina University will play a significant role in assisting IMAF-EAST, LLC.